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Posts Tagged ‘Socialism’

The Problem With Socialism

In Arts & Letters, Austrian Economics, Book Reviews, Books, Economics, History, Humane Economy, Humanities, Libertarianism, Politics, Western Philosophy on September 28, 2016 at 6:45 am

Allen 2

This review originally appeared here in The Daily Caller.

If you’re looking for a short introduction to socialism that rewards rereading, Thomas DiLorenzo’s The Problem With Socialism is it.

Perhaps your son or daughter has returned from college talking about collective control of the means of production and sporting Bernie Sanders t-shirts. Perhaps you’re a political novice looking for informed guidance.

Perhaps you’re frustrated with America’s economic decline and deplorable unemployment rates. Perhaps you listened with bewilderment as some pundit this election season distinguished democratic socialism from pure socialism in an attempt to justify the former.

Whoever you are, and whatever your occasion for curiosity, you’re likely to find insight and answers from DiLorenzo.

A professor of economics at Loyola University Maryland, DiLorenzo opens his book with troubling statistics: 43% of millennials, or at least those between ages 18 and 29, view socialism more favorably than capitalism, and 69% of voters under 30 would vote for a socialist presidential candidate. Socialism—depending on how it’s defined in relation to communism—may have killed over 100 million people and impoverished countless others over the course of the 20th Century.

So why have the youth (full disclaimer: by certain measures, at 33, I’m considered a millennial myself) welcomed this ideology that’s responsible for mass killings, organized theft, war crimes, forced labor, concentration camps, executions, show trials, ethnic cleansing, disease, totalitarianism, censorship, starvation, hyperinflation, poverty, and terror?

Why have death, destruction, and abject destitution become so hip and cool? Because of effective propaganda and utopian promises of “free” everything.

The problem is, as anyone who’s ever studied economics knows, there’s no such thing as free stuff. Somebodypays at some point.

“What socialists like Senator Sanders should say if they want to be truthful and straightforward,” DiLorenzo thus avers, “is not that government can offer citizens anything for free, but that they want healthcare (and much else) to become a government-run monopoly financed entirely with taxes. Taxes hide, but do not eliminate, the cost of individual government programs.”

And these programs are far more expensive to society than they would be on the free market.

The predicable rejoinder to such a claim — repeated ad nauseam by television personalities—is that socialism works, nay thrives, in, say, Sweden. DiLorenzo corrects the record: “Socialism nearly wrecked Sweden, and free market reforms are finally bringing its economy back from the brink of disaster.”

Strong language, but DiLorenzo maps the history and supplies the data to back it up. “The real source of Sweden’s relatively high standard of living,” he explains, has “everything to do with Sweden avoiding both world wars and jumping into the industrial revolution when its economy was one of the freest, least regulated, and least taxed in Europe.”

Other common binary assumptions are reversed in these pages: socialism causes pollution whereas capitalism protects the environment; socialism leads to war whereas capitalism is peaceful; socialism consolidates power among an elite few whereas capitalism decentralizes and disperses power, which ultimately resides with individual consumers making small economic adjustments based on their particular needs.

Even socialized medicine proves more inequitable than market-based alternatives. Proponents of Canadian-style healthcare ignore the fact that “Canadian health care is actually far more expensive, and the quality far lessthan it would be if doctors and hospitals had to compete for patients on the basis of quality and price.”

Coloring his analysis with references to the Austrian economists Ludwig von Mises, Friedrich Hayek, and Murray Rothbard, DiLorenzo undertakes a variety of other issues implicated by socialism: egalitarianism, fascism, income taxation, wage and price controls, monopolies, public schooling, and more.

Had I been his publisher, I would have insisted that he also include disturbing, graphic, and gruesome images of real, dead human bodies stacked on real, dead human bodies, of ransacked churches, and of confiscated property—alarmingly tangible consequences and horrifying illustrations of pure, realized socialism.

Senator Sanders and most of his followers mean well, of course, and genuinely and in good faith advocate policies they believe to be in the best interests of the United States. Yet the history of the cause they champion is fundamentally at odds with their desired goals.

DiLorenzo has the courage to call socialism what it is: “the biggest generator of poverty the world has ever known.” For young students especially, his concise primer could make the difference between feeling the Bern, and getting burned.

Make America Mobile Again

In America, American History, Arts & Letters, Book Reviews, Books, Humane Economy, Humanities, Law, Politics on August 10, 2016 at 6:45 am

Allen 2

This review originally appeared here in The American Spectator.  Note that some of the references to the presidential election are now dated but were timely when this review was originally published.

This election season has proven that, regardless of who becomes the Democratic or Republic nominee for president, the American political landscape has been reshaped. Candidates expected to have a smooth path to their party’s nomination have met, instead, a bumpy road. The rise of Donald Trump and Bernie Sanders as viable candidates reflects the growing feeling among ordinary Americans that the system is rigged, that they’re stuck in conditions enabled and controlled by an amorphous cadre of elites from Washington and Wall Street.

Income inequality is higher today than it’s been in nearly a century. Middle and lower class citizens of other First World countries enjoy more economic mobility than do middle and lower class Americans. The United States has fallen behind managerial and quasi-socialist governments in Europe in empirical rankings of economic freedom. The gap between the so-called 1% and the rest of America is growing, and recent college graduates, saddled with student loan debt and poor job prospects, are financially behind where their parents were at the same age.

Things don’t look promising. But one law professor, F. H. Buckley of the freshly named Antonin Scalia Law School at George Mason University, outlines ways to repair structural, systemic burdens on the American economy. His new book, The Way Back, published today by Encounter Books, provocatively advocates for socialist ends by capitalist means.

Although the word socialism recalls revolution, stifled competition, attacks on private ownership, abolition of the price-system and sound economic calculation, hunger, mass-murder, off-brand goods and low-quality services, among other demonstrable horribles, Buckley has something less vicious in mind. By socialism, he does not mean a centralized government that replaces the market system with economic planning and state control of the means of production. His “socialism” is not socialism at all.

Leaving socialism undefined, he suggests that free-market economics (a term he avoids but implies) and the dismantling of the regulatory state will do more than actual socialism and its variants to lift people out of poverty and maximize their quality of life. The Left, in short, has asked the right questions about income inequality and economic mobility but supplied the wrong answers or solutions. “Sadly,” Buckley complains, “those who loudly decry income disparities often support policies which make things worse.”

It’s the aristocratic elites, in Buckley’s view, who benefit from mass bureaucracy, the welfare state, a broken immigration and public-school system, trade barriers, a flawed tax code, and a general decline in the rule of law. These unjust institutions, policies, and conditions, with their built-in advantages for a select few, cause and sustain economic immobility. They solidify the place of aristocrats — what Buckley also calls the New Class — at the top of the social stratum. Those with high levels of wealth game the system through special favors, government grants, shell companies, complicated tax schemes, offshore banking, and other loopholes designed to ensure that the 1% are excluded from the regulatory barriers imposed and administered by government at the expense of the 99%.

The aristocracy that Buckley targets is not the natural aristocracy celebrated by certain American Founders for its virtue and political disinterestedness. It’s an artificial aristocracy that has little to do with merit or talent. The Founders — probably all of them — would have been appalled by the likes of Bill and Hillary Clinton: figures who became multi-millionaires through partisan politics. The Clintons embody the new artificial aristocracy. They amassed their wealth by championing programs that have slowed economic mobility while purporting to do the opposite. The Founders, by contrast, believed that benevolent aristocrats would be free from economic pressure and thus would not succumb to the temptations to use government positions or privileges for personal gain.

The Founders would have cringed to learn that public service has become a vehicle to riches. For all his many faults, Donald Trump appeals to disenfranchised Americans because he declares he’s financed his own campaign and admits that a rigged system — exemplified by our federal bankruptcy laws — has worked in his favor. He knows the government system is unfair and claims he wants to change it.

“America was a mobile society for most of the twentieth century,” Buckley says, citing statistics and substantiating his claim with charts and graphs. Trump’s supporters no doubt long for those days of economic mobility that Buckley locates in the exuberant 1950s.

When Trump announces that he wants to make America great again, people stuck at the bottom of the rigid class divide respond with enthusiasm. On a subterranean level, they seem to be hoping that America can once again become a mobile society, a place where a lowly pioneering frontiersman like Abraham Lincoln (Buckley’s favored symbol of social and economic mobility) can rise from humble beginnings to become the President of the United States. Buckley believes that “the central idea of America, as expressed in the Declaration [of Independence], became through Lincoln the promise of income mobility and a faith in the ability of people to rise to a higher station in life.”

Class structure is more settled in America than in much of Europe. Yet America has always defined itself against the European traditions of monarchy, aristocracy, dynasty, and inherited privilege. Buckley states that “America and Europe have traded places.” The trope of the American Dream is about rising out of your received station in life to accomplish great things for yourself and your posterity. What would it mean if U.S. citizens were to envy, instead, the European Dream? What if America is now the country of privilege, not promise? If the American financial and economic situation remains static, we’ll learn the answers to these questions the hard way.

Perhaps the most interesting and unique feature of Buckley’s book is his embrace of Darwinian theory — including the genetic study of phenotypes and kin selection — to explain why American aristocrats combine to preserve their power and restrain the middle and lower classes. In short, people are hard-wired to ensure the survival of their kind, so they pass on competitive advantages to their children. “American aristocrats,” Buckley submits, “are able to identify each other through settled patterns of cooperation called reciprocal altruism.” People organize themselves into social groups that maximize the genetic fitness of their biological descendants. If certain advantages are biologically heritable, then “a country would have to adopt punitive measures to handicap the gifted and talented in order to erase all genetic earnings advantages.”

Eugenics measures were popular during the Progressive Era, before we learned about the horrors of Nazi genocide and eugenics, but surely the Left does not want to return to such inhumane and homicidal practices to realize their beloved ideal of equality. Yet Buckley reveals — more subtly than my summary suggests — that biological tampering is the only way for egalitarians to transform their utopian fantasies into a concrete reality.

To those who might point out that Buckley, a tenured law professor living in the handsome outskirts of D.C., is himself a member of this self-serving aristocracy, Buckley declares that he’s a traitor to his class. Without bravado or boast, he presents himself as the rare altruist who recognizes the net gains realized through reasonable cooperation among disparate groups.

Trump and Ted Cruz ought to have Buckley’s book on hand as they make their final case to the electorate before this summer’s convention. Buckley explains why conservatives, libertarians, and Republicans alike should care about economic mobility and inequality. By ignoring the problem of economic disparity, he warns, “the Republican establishment has handed the Democrats a hammer with which to pound it.” Buckley identifies the types of cronyism and economic barriers to entry that have caused social immobility and inequality. To resolve our troubles, he advocates “easy pieces of useful and efficient legislation” that he dubs his “wish list.”

The final section of his book describes this “wish list” and sketches what Americans can do to reinvigorate their economy and make their country mobile again. By facilitating educational choice and charter schools, streamlining the immigration system, curtailing prosecutorial overreach and the criminalization of entrepreneurship, and cutting back on the financial regulations, tax loopholes, and corporate laws that are calculated to benefit rather than police those at the top, Americans can bring back the conditions necessary for the proliferation of individual liberty and prosperity — or, in Buckley’s words, restore the promise of America.

Free Not to Vote

In America, Arts & Letters, Austrian Economics, Libertarianism, News and Current Events, Politics on October 22, 2014 at 8:45 am

Allen 2

This piece first appeared here as a Mises Emerging Scholar article for the Ludwig von Mises Institute Canada.

The 2014 U.S. midterm elections are coming up, and I don’t intend to vote. A vote is like virginity: you don’t give it away to the first flower-bearing suitor. I haven’t been given a good reason, let alone flowers, to vote for any candidate, so I will stay home, as well I should.

This month, my wife, a Brazilian citizen, drove from Auburn, Alabama, to Atlanta, Georgia, on a Sunday morning to cast her vote for the presidential election in Brazil. She arrived at the Brazilian consulate and waited in a long line of expatriates only to be faced with a cruel choice: vote for the incumbent socialist Dilma Rousseff of the Workers’ Party, for the socialist Aécio Neves of the Brazilian Social Democracy Party who is billed as a center-right politician, for the environmentalist socialist Marina Silva of the Socialist Party, or for any of the other socialist candidates who were polling so low that they had no chance of victory. Brazil maintains a system of compulsory voting in addition to other compulsory schemes such as conscription for all males aged 18.

Logan Albright recently wrote about the folly of compulsory voting, support for which is apparently growing in Canada. He criticized the hypocrisy of an allegedly democratic society mandating a vote and then fining or jailing those who do not follow the mandate. He also pointed out the dangers of forcing uneducated and uninformed citizens to vote against their will. This problem is particularly revealing in Brazil, where illiterate candidates have exploited election laws to run absurd commercials and to assume the persona of silly characters such as a clown, Wonder Woman, Rambo, Crazy Dick, and Hamburger Face, each of which is worth googling for a chuckle. The incumbent clown, by the way, was just reelected on the campaign slogan “it can’t get any worse.” Multiple Barack Obamas and Osama bin Ladens were also running for office, as was, apparently, Jesus. The ballot in Brazil has become goofier than a middle-school election for class president.

Even in the United States, as the election of Barack Obama demonstrates, voting has become more about identity politics, fads, and personalities than about principle or platform. Just over a decade ago, Arnold Schwarzenegger became the Governor of California amid a field of second-rate celebrities while a former professional wrestler (the fake and not the Olympian kind of wrestling) Jesse “the Body” Ventura was winding up his term as the Governor of Minnesota. Today comedian Al Franken holds a seat in the United States Senate. It turns out that Brazil isn’t the only country that can boast having a clown in office.

No serious thinker believes that a Republican or Democratic politician has what it takes to boost the economy, facilitate peace, or generate liberty. The very function of a career politician is antithetical to market freedom; no foolish professional vote-getter ought to have the power he or she enjoys under the current managerial state system, but voting legitimates that power.

It is often said, “If you don’t vote, you can’t complain.” The counterpoint is that voting ensures your complicity with the policies that elected politicians will enact. If you don’t vote, you lack complicity. You are not morally blameworthy for resisting the system that infringes basic rights or that offends your sense of justice and reason. You have not bestowed credibility on the government with your formal participation in its most sacred ritual. The higher the number of voters who participate in an election, the more legitimacy there is for the favored projects of the elected politicians, and the more likely those politicians are to impose their will on the populace by way of legislation or other legal means.

Refusing to vote can send a message: get your act together or we won’t turn out at the polling stations. Low voter turnout undermines the validity of the entire political system. Abstention also demonstrates your power: just watch how the politicians grovel and scramble for your vote, promise you more than they can deliver, beg for your support. This is how it ought to be: Politicians need to work for your vote and to earn it. They need to prove that they are who they purport to be and that they stand for that which they purport to stand. If they can’t do this, they don’t deserve your vote.

Abstention is not apathy; it is the exercise of free expression, a voluntary act of legitimate and peaceful defiance, the realization of a right.

There are reasonable alternatives to absolute abstention: one is to vote for the rare candidate who does, in fact, seek out liberty, true liberty; another is to cast a protest vote for a candidate outside the mainstream. Regardless, your vote is a representation of your person, the indicia of your moral and ethical beliefs. It should not be dispensed with lightly.

If you have the freedom not to vote, congratulations: you still live in a society with a modicum of liberty. Your decision to exercise your liberty is yours alone. Choose wisely.

Thoughts on ‘The Road to Serfdom’: Chapter 4, “The ‘Inevitability’ of Planning”

In Arts & Letters, Austrian Economics, Book Reviews, Books, Britain, Economics, History, Humane Economy, Humanities, Liberalism, Libertarianism, Philosophy, Politics, Western Civilization, Western Philosophy on September 18, 2013 at 7:45 am

Slade Mendenhall

Slade Mendenhall is an M.Sc. candidate in Comparative Politics at the London School of Economics, with specializations in conflict and Middle Eastern affairs. He holds degrees in Economics and Mass Media Arts from the University of Georgia and writes for The Objective Standard and themendenhall.com, where he is also editor.

The following is part of a series of chapter-by-chapter analyses of Friedrich Hayek’s The Road to Serfdom. Other installments in the series can be found here: Introduction, Chapter 1, Chapter 2, Chapter 3.

In Chapter IV of The Road to Serfdom, entitled “The ‘Inevitability’ of Planning”, Hayek sets out to dispel the claim by advocates of socialist planning that controls are a necessary part of an advanced, modern economy and that without them the economy would cease to function. He recognizes that socialist claims as to the inevitability of planning can be broadly categorized into three types of argument, then proceeds to refute each. He does so thoroughly and effectively. In the course of reading his arguments, however, we unfortunately find more of the same sorts of errors that have punctuated previous chapters. Though these errors are not as numerous as those we have already seen from Hayek, they are fatal to the cause of liberty. Hayek’s flaws here confirm our earlier assertion that his view of the argument for freedom is so firmly rooted in an economic, cost/benefit framework as to make him unsuited to presenting the comprehensive defense that capitalism as a system of individual rights needs and deserves.

Hayek begins by accurately describing a circumstance quite familiar to us today: politicians who advocate central planning doing so on the claim that circumstances somehow demand controls, and that it is not a choice but a necessity that the government intervene if we are to retain a functioning economy. The familiarity one finds in reading his characterization of this mode of thinking reveals how constant and unchanging such arguments are across generations and throughout the Western world. The arguments he describes, though drawn from England in the 1940s, are replayed in the halls of the US Congress week after week, year after year to the detriment of the rights and success of private businesses, their vendors, customers, employees, investors, and all who share in the economy with them.

Distinguishing the various arguments used to support this insistence upon the need for planning, Hayek finds three purported bases for their claims: technological advancement, societal complexity, and the need for coercive monopoly.

Argument I: Technological Advancement

As to the first, he writes, “Of the various argument employed to demonstrate the inevitability of planning, the one most frequently heard is that technological changes have made competition impossible in a constantly increasing number of fields, and that the only choice left to us is between control of production by private monopolies and direction by the government” (32). The preeminence of this argument above the others may not hold the number one position that it did in Hayek’s day, as other arguments for market regulation have debatably become more prevalent, but it certainly remains one of the leading lines of thought in antitrust.

Hayek characterizes such arguments as resting largely on deterministic conceptions of economic progress, ones that in the early 20th century viewed Germany, with its coincidence of economic planning, a strong industrial sector, and large companies operating in collusion with the national government as the vanguard of human progress. He points to the roots of this thinking in Germans’ misconceptions of their own system: “It is largely due to the influence of German socialist theoreticians, particularly Sombart, generalising from the experience of their country, that the inevitable development of the competitive system into ‘monopoly capitalism’ became widely accepted” (34), Hayek offers several valid economic and historical arguments against this, refuting the suggestion by many that a free economy naturally, inevitably congeals into small number of sprawling monopolies.

Hayek points out that monopolies arising purely from efficiency and natural market forces are rare and very difficult to sustain, thus making competitive arguments the norm in a free economy. He acknowledges that most monopolies arise from government favors and protection—constituting what can best be termed coercive monopolies. “Not only the instrument of protection, but direct inducements and ultimately compulsion, were used by the governments to further the creation of monopolies for the regulation of prices and sales” (34).

He makes clear that the progress of the German economy was not such that monopolies resulted naturally and were subsequently checked by government controls, but rather that the companies in question attained their monopoly status through that very culture of political collusion. He points to the same mechanism of political influence and pull-peddling in the establishment of protectionist policies and the formation of inefficient, monopolized industries in the United States and Great Britain as well.

“That [in Germany] the suppression of competition was a matter of deliberate policy, that it was undertaken in the service of the ideal which we now call planning, there can be no doubt. In the progressive advance towards a completely planned society the Germans, and all the people who are imitating their example, are merely following the course which nineteenth-century thinkers, particularly Germans, have mapped out for them. The intellectual history of the last sixty or eighty years is indeed a perfect illustration of the truth that in social evolution nothing is inevitable but thinking makes it so” (35).

Making this and other points as to the origins of large monopolies, Hayek establishes a strong historical case against the belief that unchecked market forces lead naturally to the creation of monopolized industries. What he does not do, however, is take a stand in defense of naturally occurring, non-coercive monopolies when and where they do occur. This is to be expected. Influenced by ideas dominant in the field of economics both then and now, Hayek has already established briefly in previous chapters his support for employing antitrust policies to facilitate competition.

What Hayek and others of this persuasion fail to note, however, is the two-fold case for free market monopolies: the profound economic value they offer and the protection of individual rights. As rare as these monopolies are, they do occur. When they arise, they do so because a company has achieved such a profound degree of efficiency that no other company is able to compete in the same market and must exit the market place.

Such monopolies have not attained their status through force or the rule of law, but through so consistently providing the best product for the money that their appeal in a market overwhelms all potential competitors. It may not conform to the idealized, Platonic notion of ‘competitive markets’ to which modern economics has become so hidebound, but that is a paltry explanation to offer people as an apology for why the company they patronize had to be divested of its assets for offering them too much value, and for why they are now better off having to pay higher prices for the same goods and services. To the contrary: the achievement of the kind of superlative efficiency that defines free market monopolies, from which the customers and general population gain as surely as the company itself, should not be condemned but praised.

More than this, the proper defense of free market monopolies is based in the property rights of the owners of the company—be they the operators themselves, or shareholders of a publicly traded company. No matter the extent to which their operations do or do not conform to economists’ notions of which market forms are to be favored, neither they nor policymakers nor the general public have the right to take from them that which is rightfully theirs in the name of creating a more efficient allocation of resources.

In today’s debates, a derivative line of thinking from the technology argument usually takes the form, ‘If one company gains such a technological advantage as to offer its goods and services at a price and quality with which no other company can compete, shouldn’t the government intervene?’ Faced with such a question, any defender of liberalism—that is, anyone who value’s man’s life and individual rights above subservience to some ill-defined collective ‘good’—should offer a resounding “Absolutely not!” As in his earlier chapters, though, Hayek makes no mention of rights here and is thus unable to offer this kind of principled defense—or, for that matter, any defense.

Argument II: Societal Complexity

The second argument for the inevitability of planning addressed by Hayek is loosely related to the first, with an added macroeconomic dimension. He writes,

“The assertion that modern technological progress makes planning inevitable can also be interpreted in a different manner. It may mean that the complexity of our modern industrial civilisation creates new problems with which we cannot hope to deal effectively except by central planning” (35) [Emphasis mine].

This argument should be strikingly familiar to those in modern America, ringing from both right and left as both sides of the political spectrum apologize for our massive regulatory system with vague, arbitrary claims to the effect that there exists some unnamed, undefined essential quality to today’s economy that so fundamentally differentiates it from that of earlier periods as to require the forcible regulation of trade. What is this fundamental difference? How and at what point did it emerge? What about the complexity of the economy negates the organizational virtues of the price system? Blank out. The apologists have no causal explanation, only inherited and unchallenged bromides.

“What they generally suggest is that the increasing difficulty of obtaining a coherent picture of the complete economic process makes it indispensable that things should be coordinated by some central agency if social life is not to dissolve in chaos” (36).

Such unsubstantiated conjectures and baseless arguments never require much to be toppled, but fortunately Hayek provides a more than adequate shove, making the case that greater complexity in an economy is not an argument in favor of central planning, but rather an argument against it. The more complex an economic system, the more valuable it becomes that each party, knowing their own costs and values, conducts their own planning, achieving order through the natural coordination of prices, each communicating information as to the supply and demand of resources in an open economy.

Argument III: The Need for Coercive Monopoly

The last argument in favor of planning somewhat reverses the trend of the first two, justifying planning as a means of imposing monopolies rather than preventing them, and revealing the crux of the statists’ argument to be not the protection of competition throughout the economy, but the socialist planner’s ability to pick and choose when and in what sectors competition will prevail.

“There is yet another theory which connects the growth of monopolies with technological progress, and which uses arguments almost opposite to those we have just considered; though not often clearly stated, it has also exercised considerable influence. It contends, not that modern technique destroys competition, but that, on the contrary, it will be impossible to make use of many of the new technological possibilities unless protection against competition is granted, i.e., a monopoly is conferred” (37).

This particular argument for government planning is less common, as its applications are less frequent throughout economies. The most notable circumstance in which this argument is presented is with respect to so-called ‘natural monopolies’ (a term used by economists that ambiguates other kinds of natural monopolies produced in a free market, as we described earlier) in the utilities sectors of modern economies. Large-scale enterprises such as electric companies that require heavy, permanent or semi-permanent installations of infrastructure such as power grids are described by those who teach this model of the ‘natural monopoly’ as incapable of making such investments without a guarantee from the local government that all competition will be prohibited within the municipality.

The history of the electric power industry in the Unites States, however, shows a different story—one in which the major driver of the ‘natural monopoly’ model was not the inefficiency of competitive markets, but rather the political collusion between state legislatures and early power industry executives who were, in many cases, given no choice but to keep legislators happy with rewards and employment or face losing the investments they had already made.

Intriguingly, however, Hayek makes only a passing mention of this obvious and most frequent application of the ‘natural monopoly’ argument. He opts instead to dismiss most instances of its application (rightfully) as “a form of special pleading by interested parties” (37), then to proceed into a bizarre hypothetical about England allowing only one make of automobile if it meant lower prices on all automobiles. He presents this as a potentially valid application of the idea, arguing only that such cases are “certainly not instances where it could be legitimately claimed that technological progress makes central direction inevitable. They would merely make it necessary to choose between gaining a particular advantage by compulsion and not obtaining it—or, in most instances, obtaining it a little later, when further technical advance has overcome the particular difficulties” (38).

Hayek the economist seems to consider such an interventionist policy at least plausible, if debatably desirable. But what of Hayek the liberal political theorist? Under what conditions would he find such a policy acceptable? Would the strict prohibition of initiating force, so frequently invoked among libertarians, be the standard? Not quite. “[I]t must be admitted,” Hayek writes, “that it is possible that by compulsory standardisation or the prohibition of variety beyond a certain degree, abundance might be increased in some fields more than sufficiently to compensate for the restriction of the choice of the consumer” (38) [Emphasis mine.].

Let us ask: what level of abundance would you require to surrender your right to choose how you wish to dispose of your income? What is the exchange rate between degrees of efficiency and the right to trade freely? And for producers: how compensated will you feel at the knowledge your automobile is less expensive when your business is being shut down by the government for offering customers too much diversity in the marketplace? Many who read this in today’s mixed economy will likely have similarly mixed feelings and mixed premises in their responses to these questions. Thus, let us reframe the issue to put it in stark relief.

Imagine that you live in a society that enacts such a policy of homogenizing the nation’s automobiles. The government is left to decide who will remain in the automobile business in the ways it usually decides such matters. The last businessmen to grovel will be the first to go. There is no more choice in make or model. Competition in quality and unique features is gone. You, however, are left with a less expensive automobile, your neighbors are left with less expensive automobiles, and the supply of them to the general public skyrockets. (This is a fantasy, remember, so you’ll forgive me if I pretend a government program is successful even if only in the short term.)

Now imagine that instead of automobiles, the product is healthcare.

How much are you willing to trade of your rights for greater efficiency? What is your price? And how strong a defender of economic freedom is Mr. Hayek? The answer is clear and tragic.

Hayek establishes here firmly and conclusively that he is not, in fact, much of a political theorist. He is ultimately a dryly calculating economist plotting your rights on a utility curve.  Though many of Hayek’s admirers will no doubt reject this assessment, it is difficult to argue with his own words as he lays out his fundamental basis for liberalism as such. “[T]he argument for freedom,” according to Hayek, “is precisely that we ought to leave room for the unforeseeable free growth” (38).

To anyone who values man’s fundamental rights; who believes that those rights are derived from his nature and not subject to popular will; who thinks that freedom is rightfully his; who rejects force as a necessary or proper ingredient in human social relationships; who recognizes that the history of human innovation and progress has rested on the freedom of man’s mind to study and master the world around him; who claims the prerogative to pursue his own self-interest; who retains his self-esteem; who holds his own happiness as the purpose of his life: the only proper answer, the only moral answer is “Absolutely not!”

The argument for freedom, Mr. Hayek, is the assertion of man’s right to his own life, a life that is its own justification. Nothing else is required and nothing else will do.

Hayek’s fourth chapter, “The ‘Inevitability’ of Planning”, thus leaves us back at the low-point of Chapter I. It is impossible, based on the philosophical framework established in the introduction and first four chapters, that Hayek could at this point offer a proper defense of liberalism. Though I hesitated to make the comparison earlier, hoping he might redeem himself, it is fair to say now that Hayek is scarcely better than many of the pragmatist politicians today who argue for capitalism as a practical benefit, make no mention of its moral values, and ultimately treat principles as loosely-held guiding ideas with little more substance than campaign slogans. He may be much farther toward the liberal end of the spectrum than many of them; it would be inaccurate to say otherwise. Ultimately, though, half-hearted, half-formed defenses of freedom by advocates who lack the tenacity to defend their professed values only facilitate their destruction.

The real Road to Serfdom is paved with incomplete defenses of liberty, and once one has allowed them to serve as the foundation for the defense of a free society, matters of degree are only matters of time.

Thoughts on ‘The Road to Serfdom’: Chapter 2, “The Great Utopia”

In Arts & Letters, Austrian Economics, Book Reviews, Books, Britain, Economics, Historicism, History, Humane Economy, Humanities, Liberalism, Libertarianism, Philosophy, Politics, Western Civilization, Western Philosophy on September 13, 2013 at 7:45 am

Slade Mendenhall

Slade Mendenhall is an M.Sc. candidate in Comparative Politics at the London School of Economics, with specializations in conflict and Middle Eastern affairs. He holds degrees in Economics and Mass Media Arts from the University of Georgia and writes for The Objective Standard and themendenhall.com, where he is also editor.
This article is the third installment of a chapter-by-chapter analysis of Friedrich Hayek’s The Road to Serfdom. Analyses of Hayek’s introduction and Chapter I can be found here and here, respectively.

Hayek’s second chapter opens with several important reminders about the nature and history of socialism: that its rise was achieved not by the West having forgotten liberal ideas or the historical consequences of collectivism, but by an active campaign of persuasion against liberalism as an ideal; that it has roots in the French Revolution as an authoritarian answer to that movement’s more individualistic elements; and that only through the democratic influences of the revolutions of 1848 did socialism shed its authoritarian origins and assume a democratic veneer.

From there, it proves somewhat of a novelty to one accustomed to today’s concrete-bound, anti-conceptual political rhetoric. The chapter is, fundamentally, a brief lesson in political epistemology, dealing with the historical abuse of concepts that facilitated the popular adoption of socialist ideas.

Chief among the distortions Hayek notes is the socialist reconfiguration of the notion of liberty itself. The alleged “new freedom” introduced by socialists “was to bring ‘economic freedom’ without which the political freedom already gained was ‘not worth having’” (19). Hayek astutely describes this distortion of the concept of freedom:

“To the great apostles of political freedom the word had meant freedom from coercion, freedom from the arbitrary power of other men, release from the ties which left the individual no choice but obedience to the orders of a supervisor to whom he was attached. The new freedom promised, however, was to be freedom from necessity, release from the compulsion of the circumstances which inevitably limit the range of choice of all of us, although for some very much more than for others. Before man could be truly free, the ‘despotism of physical want’ had to be broken, the ‘restraints of the economic system’ relaxed… The demand for the new freedom was thus only another name for the old demand for an equal distribution of wealth” (19).

Hayek recognizes the epistemological methods by which socialists attained power, consisting largely of equivocation and anti-conceptual thinking, lumping together disparate concretes and attaching to them a single label—“freedom”—in order to pass off an intellectual package-deal on the general public, persuading them to embrace a contradiction. Though he does not go into this kind of detailed description of the process, Hayek at least acknowledges that the methods by which such intellectual smuggling is carried out form too large a subject to be discussed in the context of the chapter, and does not claim to have thoroughly explained it as a philosophical process but only as a historical one.

He proceeds to assess more recent, twentieth century distortions of the concept of socialism itself and how it has become muddled and confused by “progressives” who view fascism and communism as fundamental opposites, failing to recognize that both are merely species of the same genus. The processes of evasion and distortion, fueled by an excessive focus on concrete particulars at the expense of fundamentals, are thus seen to wreak as much havoc in the thinking of those twentieth-century advocates of socialism in their understandings of themselves and relations to one another as they did in the minds of nineteenth-century liberals who were persuaded to adopt socialist ideas. That statists are as much the victims of their own illogic as those they seek to oppress soon becomes clear.

In what might be one of the greatest compliments one could offer to liberalism, Hayek then points out, both in his own words and quotes by socialists themselves, how history and socialists’ experiences have shown time and again that despite their alleged fundamental opposition to one another, fascists and communists are known by the other to be prime targets for recruiting, fueling and perpetuating the hatred between them as each views the other as a competitor for the same pool of minds, but both are well aware of the immunity of true liberals to the propaganda of either. Liberals are viewed as resistant to their persuasions and unsuitable for the culture of perpetual compromise that characterizes socialist politics.

Again, in the end, Hayek effectively ties the subject back to contemporary Britain and how these same ideas, once prevalent in Germany between the two wars, are alive and well across the channel. “[I]n this country,” he writes, “the majority of people still believe that socialism and freedom can be combined… So little is the problem yet seen, so easily do the most irreconcilable ideals still live together, that we can still hear such contradictions in terms as ‘individualist socialism’ seriously discussed” (23).

Perhaps the only flaw in this second chapter consists of Hayek’s uncritical acceptance of the term “democracy” as being in any way synonymous with freedom or liberalism—a common error (even more so in today’s world!), and not one that deprives the chapter more generally of valuable insights, but one that it could have benefited from correcting. Hayek writes admiringly of Alexis de Tocqueville’s work, “Nobody saw more clearly than de Tocqueville that democracy as an essentially individualist institution stood in an irreconcilable conflict with socialism” (18).

Democracy, however, is not an essentially individualist institution. It is, in fact, not essentially anything except inclusive of a political process that allows for the popular, institutional expression of political preference and ideas. Democracy allows people to vote. Whether that vote is limited by a founding document protecting individual rights or any other principle is not inherent to democracy itself, and to think it so leads to many of the befuddled responses of policymakers today when they observe the imposition of democratic processes having failed to ensure peace, justice, or any other virtue of great political societies.

Let it not be forgotten that the first democracy in human history, that from which the concept derived and upon which its essentials rest, was Ancient Greece, where the life of a man such as Socrates could be voted away on grounds no more substantial than his having propagated ideas unwelcomed by the majority.

Democracy is thus neutral with respect to individualism, only upholding it when the republican qualities of a constitution, bill of rights, and limitations on the majority will are imposed. This leaves the phenomenon of democratic socialism, which Hayek sees as an oxymoronic distortion, rather justified in formal logic, if not in any rational morality or political ethic.

Overall, Hayek’s second chapter, “The Great Utopia”, is a dramatic improvement from his first. It sets out with a direct purpose to illustrate the epistemological errors that have aided the rise of socialism, and, with skilled application of political concepts and supporting evidence, it succeeds in that task. Whether this upward trajectory continues into his next chapter, “Individualism and Collectivism”, as he addresses subjects at somewhat of a conceptual middle-range between those of his first and second chapters, we shall see in the next installment.

Thoughts on ‘The Road to Serfdom’: Chapter 1, “The Abandoned Road

In Arts & Letters, Austrian Economics, Book Reviews, Books, Britain, Economics, Epistemology, Essays, Ethics, Historicism, History, Humane Economy, Humanities, Liberalism, Libertarianism, Literary Theory & Criticism, Literature, Modernism, Philosophy, Politics, Pragmatism, Western Civilization, Western Philosophy on September 11, 2013 at 7:45 am

Slade Mendenhall

Slade Mendenhall is an M.Sc. candidate in Comparative Politics at the London School of Economics, with specializations in conflict and Middle Eastern affairs. He holds degrees in Economics and Mass Media Arts from the University of Georgia and writes for The Objective Standard and themendenhall.com, where he is also editor.

This analysis is the second installment in a series of chapter analyses of Friedrich Hayek’s The Road to Serfdom. The previous analysis of Hayek’s introduction can be found here.

If Hayek’s introduction gave us a brief summary of the ideas and practices he is setting out to oppose and contextualized the progression toward a socialist political culture in the last half century of Europe’s history, his first chapter, “The Abandoned Road”, firmly roots his grievances in the present and the problems facing England at the time of his writing and seeks to explain how England (and the West more generally) arrived there. He describes the intellectual evasions, distortions, and faulted epistemology—often consisting of poorly defined key concepts —that led to and are, in his time, perpetuating the state of affairs he observes. He then proceeds to address the subject of liberalism and how socialists who misconceive of their own system do so at least as much with its antithesis. In the process, Hayek makes many excellent observations, but also succumbs to several dangerous philosophical errors and unsubstantiated claims against laissez-faire capitalism that tarnish what might otherwise be an outstanding defense against government controls.

Hayek begins the chapter with one of the most argumentatively powerful, poignant approaches that one can take in opposing socialist ideas: illustrating to those who support more moderate, tempered versions of statist controls that though they may differ in degree from those statists they oppose, the philosophical fundamentals they advocate are the same. “We all are, or at least were until recently, certain of one thing,” he writes,

“that the leading ideas which during the last generation have become common to most people of goodwill and have determined the major changes in our social life cannot have been wrong. We are ready to accept almost any explanation of the present crisis of our civilisation except one:  that the present state of the world may be the result of genuine error on our own part, and that the pursuit of some of our most cherished ideals have apparently produced utterly different results from those which we expected” (8).

Hayek’s point is well made and much needed at a time when such widespread, utter contradictions were even more severe than they are today. Writing to Britons in the 1940s, but with as much truth to offer Americans who stumbled over the same contradictions in the 1960s and 1970s, as the platitude “we are all socialists now” manifested on Nixon’s lips as “we are all Keynesians now” (and with less fundamental difference between them than Keynesians would have you believe), he asks us to recognize that “the tendencies which have culminated in the creation of the totalitarian systems were not confined to the countries which have succumbed to them” (8-9). Nor, for that matter, are they confined to those times, and Hayek’s message to this effect—the importance of recognizing the same fundamental ideas across contexts—is as much needed today as it was then.

He goes on to recognize that the conflict between the Axis and Allied powers in World War II is fundamentally a conflict of ideas: “The external conflict is a result of a transformation of European thought in which others have moved so much faster as to bring them into irreconcilable conflict with our ideals, but which has not left us unaffected.” He is quick to point out, though, that “the history of these countries in the years before the rise of the totalitarian system showed few features with which we are not familiar” (9).

Such an appreciation for the motive power of ideas in human conflict was not so unique in Hayek’s time. In fact, the Allied leaders superlatively acknowledged the enemy they faced as “fascism” and condemned it explicitly (though the economic and social policies of FDR, along with his earlier overt flirtations with such ideas, may have made the condemnation somewhat ironic). If Hayek has a lesson to teach to this effect, it is most needed in today’s world, when the significance of philosophy is so frequently cast aside by the influences of multiculturalist nihilism and the failure, even in academia, to appreciate the role of broadly held cultural ideas in deciding man’s fate. At a time when the mention of a “clash of civilizations” invites accusations of oppressive Western chauvinism, Hayek’s acknowledgement that conflicting fundamental ideas may lead to actual conflict is a welcome reminder.

Much of the chapter appropriately looks to fundamental ideology as the cause for the rise of Nazism, seeing the rejection of individualism in favor of collectivism as a necessary prerequisite to the “National-Socialist revolution” and a “decisive step in the destruction of that civilisation which modern man had built up from the age of the Renaissance.” The spirit of this argument is undoubtedly sound. However, the method by which he proceeds to argue it leaves much to be desired. Hayek proceeds down a path of questionable historical interpretations, a half-cocked swipe at moral philosophy (that, as we shall see, is flawed but not unfamiliar to readers of this site), and ultimately an incomplete defense of the liberal policies he hopes to defend—showing the consequences of that brief glimpse of skepticism we witnessed in the introduction.

In his historical contextualization of the trends he observes, Hayek writes,

“How sharp a break not only with the recent past but with the whole evolution of Western civilisation the modern trend towards socialism means, becomes clear if we consider it not merely against the background of the nineteenth century, but in a longer historical perspective. We are rapidly abandoning not the views merely of Cobden and Bright, of Adam Smith and Hume, or even of Locke and Milton… Not merely the nineteenth- and eighteenth-century liberalism, but the basic individualism inherited by us from Erasmus and Montaigne, from Cicero and Tacitus, Pericles and Thucydides is progressively relinquished” (10).

Hayek’s invocation of these great names in the history of liberal thought is, in most instances, not misplaced. It is true that all emerged from Western civilization and that to varying extents they all fit well into the liberal, individualist tradition he means to illustrate. One would be wise to regard the inclusion of Hume and Montaigne, paragons of skepticism, as only conditional points on such a list, though Hayek’s own skepticism and that of many libertarians in his tradition would certainly allow them.

More broadly, however, it must be said that the individuals mentioned, no matter how great their contributions to political and social thought, were not often the rule in their place and time, but the exception. One can admire the works of Pericles, but should bear in mind the fickle reception he received among the Athenians. Likewise, Cicero may deserve praise above any in his time, but for those virtues we might praise he was slaughtered without trial by a dictator who faced no consequences.

Thus, as admirable as Hayek’s examples may be, to suggest that they were the norm throughout most of Western civilization is unsubstantiated. They may have embodied those qualities that most distinguished Western civilization and have been most responsible for its progress, but it was a progress often achieved by much-abused minorities. The Renaissance, Enlightenment, and nineteenth century were the high-points of individualism and Western ideals, and Hayek is right in singling them out. However, he also runs the risk of obscuring the philosophical roots of National Socialism, itself the product of contrary trends in Western thought, by engaging in careless generalization from those high-points and distinguished individuals to Western history in general.

Departing from this somewhat problematic historical interpretation, Hayek moves through a favorable discussion of the benefits of economic and political freedom on scientific innovation. His recognition and argument that “[w]herever the barriers to the free exercise of human ingenuity were removed man became rapidly able to satisfy ever-widening ranges of desire” is incontestable (12). He also anticipates the common objections by socialist apologists today who characterize the Industrial Revolution as a period of oppression by citing the difficult living conditions of the urban poor. He rightly rejects this by contextualizing the period in the experiences and expectations of those who lived through it, writing that

“[w]e cannot do justice to this astonishing growth if we measure it by our present standards, which themselves result from this growth and now make many defects obvious. To appreciate what it meant to those who took part in it we must measure it by the hopes and wishes men held when it began… that by the beginning of the twentieth century the working man in the Western world had reached a degree of material comfort, security, and personal independence which a hundred years before had seemed scarcely possible” (12-13).

What proceeds from there is where Hayek seems on unsteady footing, as he briefly undertakes the task of trying to explain what ideas diverted man from the individualist course set from the Renaissance to the nineteenth century. Inexplicably, Hayek credits an excess of ambition as responsible for the turn toward socialism. He writes,

“What in the future will probably appear the most significant and far-reaching effect of this success is the new sense of power over their own fate, the belief in the unbounded possibilities of improving their own lot, which the success already achieved created among men. With success grew ambition—and man had every right to be ambitious” (13).

He returns to the idea again later, writing that,

“Because of the growing impatience with the slow advance of liberal policy, the just irritation with those who used liberal phraseology in defence of anti-social privileges, and the boundless ambition seemingly justified by the material improvements already achieved, it came to pass that toward the turn of the century the belief in the basic tenets of liberalism was more and more relinquished” (14-15).

It is here that Hayek’s inadequacy in analyzing philosophical ideas, and perhaps an economic bias toward looking at matters purely as a function of supply and demand, begins to show. The notion that an inadequate or insufficiently rapid provision of living standards by capitalism is to blame for the introduction and spread of socialism is baseless, as it not only commits the philosophical error of attributing a total change in fundamental beliefs to external conditions, but also ignores the fact that the introduction of socialist policies preceded the slowdown in quality of living improvements in the Western world—and, furthermore, that the slowdown still wasn’t all that slow, as anyone who looks at world history from 1870 to 1928 will readily observe.

Thus, Hayek’s notion that “ambition” is somehow to blame is irrational. If we accept the notion that capitalism was responsible for man’s improved quality of living, then the only function that ambition should serve in this context is to drive men back toward capitalism and its fundamental values—not toward socialism. To the contrary, it is not an excess of ambition that drove men away from capitalism, but the fact that the philosophical principles that underlie and empower capitalism were not consistently established in the minds of its practitioners in the first place. That is: those who lived under capitalism had not explicitly embraced reason as man’s means of acquiring knowledge, nor rational egoism as his proper ethical system, and thus lacked the fundamentals on which individualism rests. Thus, ultimately, the individualism that Hayek admires was present in the West, but not firmly rooted enough to survive the philosophical revival of Plato in the forms of Kant and Hegel. Undercut by their philosophies, in the face of Marx and Engels the West was a pushover.

Hayek’s invocation of excess ambition as an explanation for socialism shows that though he understands the role of political ideology in man’s fate, his ability to explain how that ideology stems from deeper levels of philosophy is severely lacking. Unfortunately, he does not allow this lack of expertise to stop him from making such baseless speculations as to the roots of socialism being in man’s ambition, nor from making a similarly arbitrary and more dangerous conjecture: that the essential quality that animated the Renaissance and Western civilization’s embrace of individual man was “tolerance.”

“Tolerance,” he writes, “is, perhaps, the only word which still preserves the full meaning of the principle which during the whole of this period was in the ascendant and which only in recent times has again been in decline, to disappear completely with the rise of the totalitarian state” (3). Hayek offers no further explanation to support this statement or the implication that tolerance was the animating virtue of these times, or at the very least played some crucial role in it. Nor does he illustrate the point with citations or examples. The claim stands alone.

We are thus left to speculate as to his actual beliefs on this point. However, a look at a somewhat younger contemporary libertarian economist who dabbled in political writings such as this and who shares certain philosophical fundamentals—namely a skepticist epistemology—may shed some light on the claim. Milton Friedman similarly cited ‘tolerance’ and, more specific to Friedman’s case, “tolerance based on humility” as the fundamental basis of his libertarianism. That is: the rejection of statism based not on the rights of individuals but based on the fact that no one can rightly initiate force against another since the initiator has no basis by which to know whether the cause in whose name he would initiate that force is right or wrong. Put simply, it establishes a social system in which peaceable relations between men depend upon the impossibility of establishing objective principles. In which ignorance, not knowledge, is man’s saving grace. In which moral certainty is perceived to be the root of all tyranny.

(I will not go further into Friedman’s confused moral philosophy here, though it is encouraged that the reader reference my article “The Failures of Milton Friedman” for a fuller explanation his views and the dangers they entail.)

Whether Hayek’s implication in citing “tolerance” as the great virtue lost by the rise of collectivism is in line with Milton Friedman’s connections of “tolerance” and libertarianism is unknown, but the fact that the two men share a skepticist epistemology and both ultimately land at the same word to describe the virtue that they see to be animating their ideals cannot be ignored and provides a possible explanation for Hayek’s unsupported statement.

Where skepticist epistemology and haphazard forays into moral philosophy are found, an incomplete defense of freedom usually follows. So it is here with Hayek, who shows us precisely his conception of freedom and how it should be fought for, writing, “There is nothing in the basic principles of liberalism to make it a stationary creed, there are no hard and fast rules fixed once and for all. The fundamental principle that in the ordering of our affairs we should make as much use as possible of the spontaneous forces of society, and resort as little as possible to coercion, is capable of an infinite variety of applications” (13).

I will not engage with this statement directly, as it has been soundly argued elsewhere in other essays from this publication such as “The Philosophy of Capitalism” and Brian Underwood’s “Political Capitalism”, as well as in Ayn Rand’s essays “Man’s Rights”, “The Objectivist Ethics”, and “The Nature of Government.” I will observe simply that for a man accepted by many to be symbolic of twentieth century liberalism to take such a pragmatic, unprincipled approach to the defense of freedom stands as much as a symbol of the unsteadiness and lack of a moral basis in that movement as it does a condemnation of the man himself. What’s more, it shows that no sound defense of liberty can be based on a skepticist epistemology. A defense of man begins with an admiration for man and his nature as a rational, efficacious being. Whoever hopes to undertake a task so daunting and so crucial as a defense of man’s rights against oppression cannot enter the fray with a puttering “Who knows?!” as his battle cry.

It is the inevitable fate of such pragmatists that they should ultimately abandon a strict conception of liberty and that they should shrink principles down to the level of momentarily expedient guidelines to be cast aside at the first sign of opposition. We must be immensely grateful that the Founding Fathers of the United States had the moral basis to recognize and firmly assert the rights of “life, liberty, and the pursuit of happiness”, yoking future statesmen to these principles rather than settling for such a shrugging recommendation that they “make as much use as possible of the spontaneous forces of society.” We must be proud that Jefferson swore “an oath upon the altar of God eternal hostility against every form of tyranny over the mind of man”, and not merely an oath to “resort as little as possible to coercion.”

The distortions, sadly, do not end there. Hayek confounds our expectations further by seeking to balance his critique of socialism with a contrary charge against advocates of full individual rights, writing that “[p]robably nothing has done so much harm to the liberal cause as the wooden insistence of some liberals on certain rough rules of thumb, above all the principle of laissez faire” [emphasis mine] (13).

Hayek’s ambiguous accusation against advocates of laissez-faire, that they are somehow partly responsible for the rise of socialist policies, apparently rests on the capitalists having viewed the principle as a “hard and fast… rule which knew no exceptions” (13).  He goes on to explain that the downfall of liberalism is explainable by reference to the liberal’s strict adherence to the laissez-faire principle, finding it “inevitable that, once their position was penetrated at some points, it should soon collapse as a whole” (13).

At this point, Hayek quickly reveals several key implications: that advocates of laissez-faire are partly responsible for the rise of socialism, that laissez-faire is a flawed system, and that its legitimacy has indeed “collapse[d]” through being disproven. He continues, “No sensible person should have doubted that the crude rules in which the principles of economic policy of the nineteenth century were expressed were only a beginning, that we had yet much to learn, and that there were still immense possibilities of advancement on the lines on which we had moved” (14).

To be clear: Hayek is not referring to changes in application or translation of the existing principles, but a shift in principles as such. ‘What’, one must ask, ‘could have fundamentally changed so drastically in the period in question, to make the basic principles of economic freedom no longer relevant or applicable in one period as they had been in the previous one?’ According to Hayek, it was the inevitable result of having

“gained increasing intellectual mastery of the forces of which we had to make use. There were many obvious tasks, such as our handling of the monetary system, and the prevention or control of monopoly, and an even greater number of less obvious but hardly less important tasks to be undertaken in other fields, where there could be no doubt that the governments possessed enormous powers for good and evil;” (14)

Thus, Hayek posits that our “increasing intellectual mastery” (though I can think of a century of economic instability primarily brought by government controls that would refute this alleged “mastery”) is to credit for government intervention in the economy. He implies that the belief that governments could regulate the economy by force somehow translates to the presumption that they should do so—a significant leap that Hayek does not and cannot, without reference to philosophy, explain. Not only does this misconceive of the problem; it carelessly implies that those statesmen of earlier times did not intervene in the economy because they could not conceive of how to do so. To the contrary: earlier liberal thinkers did not plead ignorance in the face of proposed interventionism—they opposed it on principle, and suggesting otherwise is a discredit to their defenses of liberty.

Hayek’s passing statements apparently endorsing the “control of monopoly” and his suggestion that “the governments possessed enormous powers for good and evil”—that is, that good could be achieved by force just as surely as evil—only add layers to the disappointing picture established thus far. He goes on to make an unconvincing argument that the slow pace of economic progress under liberalism was to blame for people having turned away from it—a confounding claim to make about a century that witnessed the most rapid and dramatic rise in quality of life in the history of humankind, and one that even Marx himself would likely have disputed as unsubstantiated.

Finally, he ends the chapter on an agreeable note with a brief description of how the geographical flow of ideas—from Britain and the US east to continental Europe—reversed at this period in history and the prevailing current turned westward, exporting German socialist ideas to the Atlantic. He astutely summarizes how the ideas of Marx, Hegel, List, Schmoller, Sombart, and Mannheim overtook the intellectual tone set by the English after 1870. He ends on the essential point that it was ultimately the lack of confidence in their own convictions by Western thinkers that made this shift possible. In this effort—narrating the history of philosophical and cultural trade balances—Hayek is excellent and displays the power of which he is capable when he remains in his purview, capitalizing on his unique perspective.

After a promising introduction, the first chapter of Hayek’s book has proven shaky at best. The flaws are numerous and fatal: a questionable interpretation of the histories of both liberalism’s origins and socialism’s ascendance, a dangerously inadequate grasp of the role of moral philosophy in the histories he details, a desire to blame liberalism for its own destruction with insufficient substantiation, a skepticist rejection of principles that leads to a pragmatist’s approach to policy, and, finally, a rejection of laissez-faire capitalism.

To his credit, Hayek is overall favorable on matters of economic history, arguing effectively for the role of capitalism in promoting scientific progress and advances in standards of living. However, his suggestion that advancement in the nineteenth and early twentieth centuries was slow, and that this slowness of progress is to blame for the West’s acceptance of socialism, is largely without a supporting argument, is contrary to the unrivaled history of economic progress that we know to have characterized that period, and, incidentally, indulges a determinist philosophy that we saw him as likely to avoid in the introduction—a serious point of inconsistency.

Overall, Hayek’s first chapter is a dramatic step down from the introduction and a disappointment considering the reputation of the book. It is, in its own way, an abandonment of the road, if in a slightly different direction than those whom Hayek criticizes. Though future chapters may redeem the work to some extent, the fact that so much ground is lost in the first few pages is a severe blow, but one that is in keeping with the suspicions which we noted in assessing the introduction and which we warned to be on the lookout for. It illustrates well the consequences of even small cracks in one’s intellectual foundation and confirms the value of critically applying careful philosophical detective work in reading works such as this, no matter their reputation.

My Reading List for 2013

In Arts & Letters, Books, Creativity, Fiction, History, Humanities, Law, Literature, Novels, Philosophy, Politics, Western Civilization, Western Philosophy, Writing on December 12, 2012 at 8:45 am

Allen Mendenhall

Editorial Note (April 15, 2013):  At this point in the year, I have already discovered flaws in this list. For instance, I gave myself two weeks to read Augustine’s Confessions and one week to read Aquinas’s Summa Theologica.  I should have done the reverse.  Summa Theologica may have required more than two weeks to read, since I found myself rushing through it, and it is not a book through which one should rush.  My schedule has forced me to speed read some texts in order to avoid taking shortcuts.  Some of the texts on this list will therefore appear on my list for next year, so that they get the treatment and consideration they deserve.

2013 will be a good year for reading.  I’ve made a list of the books I’m going to undertake, and I hope you’ll consider reading along with me.  As you can see, I’ll be enjoying many canonical works of Western Civilization.  Some I’ve read before; some I haven’t.  My goal is to reacquaint myself with the great works I fell in love with years ago and to read some of the great works that I’ve always wanted to read but haven’t.  I wouldn’t go so far as to say that everybody ought to read these works, but I do think that by reading them, a person will gain a fundamental understanding of the essential questions and problems that have faced humans for generations.

Some works are conspicuous in their absence; the list betrays my preferences.  Notably missing are the works of Shakespeare and the canonical texts that make up the Old and New Testament.  There’s a reason for that.  I’ve developed a morning habit of reading the scriptures as well as Shakespeare before I go to work.  If I’m reading these already, there’s no need to add them to the list, which is designed to establish a healthy routine.  What’s more, the list comes with tight deadlines, and I’m inclined to relish rather than rush through the Bible or Shakespeare.

Lists provide order and clarity; we make them to reduce options or enumerate measurable, targeted goals.  Lists rescue us from what has been called the “tyranny of choice.”  Benjamin Franklin made a list of the 13 virtues he wished to live by.  What motivated him is perhaps what’s motivating me: a sense of purpose and direction and edification.

At first I wanted to assign myself a book a week, but realizing that some works are longer or more challenging than others, that as a matter of obligation I will have other books to read and review, that I have a doctoral dissertation to write, that the legal profession is time consuming, and that unforeseen circumstances could arise, I decided that I might need more time than a week per book depending on the complexity of the particular selection or the busyness of the season.  Although I hope to stick to schedule, I own that I might have to permit myself flexibility.  We’ll see.

For variety—and respite—I have chosen to alternate between a pre-20th century text and a 20th century text.  In other words, one week I might read Milton, the next Heidegger.  For the pre-20th century texts, I will advance more or less chronologically; there is no method or sequence for the 20th century texts, which I listed as they came to mind (“oh, I’ve always wanted to read more Oakeshott—I should add him.  And isn’t my knowledge of Proust severely limited?—I’ll add him as well.”).  It’s too early to say what lasting and significant effects these latter texts will have, so I hesitate to number them among the demonstrably great pre-20th century texts, but a general consensus has, I think, established these 20th century texts as at least among the candidates for canonicity.

I have dated some of the texts in the list below.  Not all dates are known with certainty, by me or anyone else.  Some texts were revised multiple times after their initial publication; others were written in installments.  Therefore, I have noted the time span for those works produced over the course of many years.

One would be justified in wondering why I’ve selected these texts over others.  The answer, I suppose, pertains to something Harold Bloom once said: that there are many books but only one lifetime, so why not read the best and most enduring?  I paraphrase because I can’t remember precisely what he said or where he said it, but the point is clear enough: read the most important books before you run out of time.

Making this list, I learned that one can read only so many great works by picking them off one week at a time.  The initial disheartenment I felt at this realization quickly gave way to motivation: if I want to understand the human condition as the most talented and creative of our predecessors understood it, I will have to make a new list every year, and I will have to squeeze in time for additional texts whenever possible.  I am shocked at the number of books that I wanted to include in this list, but that didn’t make it in.  I ran out of weeks.  What a shame.

Here is my list.  I hope you enjoy. Read the rest of this entry »

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